"The last thing banks lacked last year was deposits." Xiao Song, a gold medal financial planner at a joint-stock bank in Beijing, told the Beijing News shell financial reporter that although the deposit interest rate was lowered last year, customers' enthusiasm for deposits remained high, and many customers took wealth management funds into deposits. This year, his bank deposits have maintained rapid growth.
The preference of individual customers for deposits is also confirmed in bank financial reports. According to incomplete statistics from the Beijing News shell financial reporter, the growth rate of deposits in large state-owned banks and joint-stock banks generally remained in double digits. Among them, the growth rate and proportion of personal deposits of many banks have increased, and the growth rate of personal time deposits of some banks has reached more than 50% year-on-year.
Behind the high growth of deposits, the profitability of banks has also changed: due to the rapid growth of deposits, the interest payment ratio of banks has increased significantly, coupled with the continuous decline in credit interest rates, the net interest margin of banks has been further pressured, and some funds have entered deposits from wealth management and funds.
According to Wind data, among the 25 A-share listed banks that have disclosed their results, the net profit of banks has maintained a steady growth, and the net profit attributable to shareholders of the parent company of 25 banks last year totaled 1.86 trillion yuan. With the introduction of a series of policies to promote consumption, the effect of policies will gradually appear. After China's economy improves, it is conducive to enhancing residents' confidence in investment, and residents' investment will gradually return to normal levels.
Wang Yifeng, chief analyst of the financial industry of Everbright Securities, predicts that the credit investment boom in infrastructure and manufacturing is expected to continue this year, and the demand for housing-related financing is expected to stabilize and improve; The full-year revenue growth rate is expected to usher in an inflection point in the first quarter, and the profit growth rate remains generally stable. In the first quarter of this year, the revenue growth rate of listed banks fell to about -3%, but the revenue and profit growth rates of banks for the whole year of 2023 were 2.6% and 7.4%, respectively.
Why do ordinary people want to keep their money in the bank?
According to incomplete statistics from the Beijing News shell financial reporter, the deposit growth of A-share listed banks that have disclosed data reached more than double-digit growth last year. It is worth noting that a number of banks pointed out in their annual reports that due to the impact of the shock in the capital market, the proportion of demand deposits has declined, while the growth rate of personal time deposits has risen rapidly.
Data show that at the end of last year, China Construction Bank's domestic personal deposits were 13.07 trillion yuan, an increase of 1.80 trillion yuan over the previous year, an increase of 15.92%, and its proportion in domestic deposits increased by 1.91 percentage points to 54.08%, of which the growth rate of time deposits was 19.71%. The proportion of personal deposits of ABC increased by 0.5 percentage points from the end of the previous year to 60.6%, of which the growth rate of personal time deposits reached 21.21%.
Among joint-stock banks, the total customer deposits of China Merchants Bank increased by 18.73% over the end of the previous year, of which retail customer deposits increased by 35.66% and time deposits increased by 53.48%; The balance of personal deposits of Ping An Bank was 10349,70.34 billion yuan, an increase of 3.2022% over the end of the previous year; In 8699, the average daily balance of personal deposits will be 12.24 billion yuan, a year-on-year increase of 3.<>%.
Among city commercial banks, Bank of Ningbo pointed out that the bank's deposit balance to private customers at the end of 2022 was 2828.33 billion yuan, an increase of 32.23% over the end of the previous year; Among them, private time deposits increased by 40.58%. The proportion of personal deposits in the total deposits of Qingdao Bank was 43.16%, an increase of 7.94 percentage points over the end of the previous year, of which the growth rate of personal time deposits was 46.27%.
Such a high rate of growth in personal deposits has been rare in recent years. After 2012, as Chinese investors became more and more diversified in the wealth management products they could choose from, deposits were no longer the preferred product. But since last year, the situation has reversed: although the interest rates on various types of bank deposits have continued to fall, the phenomenon of "one order is difficult to find" for deposit products such as large deposit certificates has occurred from time to time.
In this regard, Wang Liang, president of China Merchants Bank, pointed out at the results conference that savings deposits maintained a significant year-on-year increase in many reasons. Due to the impact on residents' consumer confidence, real estate market risks, capital market shocks and other factors, people are more willing to keep money in banks.
"Behind the sharp increase in time deposits may be the change in the asset allocation of residents." Zhang Yu, an analyst at Huachuang Securities, pointed out in the research report that the obvious increase in residents' time deposits may reflect that residents are forced to use time deposits as an option for asset allocation under the circumstances of falling house prices, weakening stock markets and financial redemptions in 2022.
The products of wealth management subsidiaries stabilized after being affected
"Bank deposits are growing rapidly, and a lot of funds come from investment funds such as wealth management and funds." Xiao Song said that the clients he serves still have people who withdraw money from investment wealth management or funds into time deposits.
In 2022, it is not friendly to investment. The volatility of the capital market and bond market has greatly reduced the yield of investment products. The net value of funds and bank wealth management products once floated in a large area, and under the sharp drawdown of income, the risk appetite of bank wealth management customers was reduced, and deposit products became the best investment products that were all the rage.
"Compared with fund products, bank wealth management may be more affected." An insider of a wealth management subsidiary of a state-owned bank said that during the bond market volatility in November and December last year, there were large-scale redemptions of bank wealth management, and judging from the results of the linkage of the parent bank, these customers mainly converted their funds into time deposits.
At the end of last year, bank wealth management subsidiaries experienced overall negative growth in product scale for the first time. According to the Annual Report of China's Banking Wealth Management Market (2022), by the end of 2022, the existing scale of bank wealth management products was 27.65 trillion yuan, down 4.66% from the beginning of the year; That's down nearly 29 percent from when it first exceeded $7 trillion in the middle of last year.
According to the annual reports of banks, the product scale of wealth management companies such as CCB Wealth Management, ICBC Wealth Management, ABC Wealth Management, BOCOM Wealth Management, and CMB Wealth Management showed negative growth year-on-year. The wealth management companies of a number of joint-stock banks such as CNBC Wealth Management, Everbright Wealth Management and Industrial Bank Wealth Management showed an increase of more than 10% in product management scale, but the growth rate also decreased compared with previous years.
"From the performance point of view, the fluctuation of the bond market has a greater impact on the wealth management companies of state-owned banks, which may be related to the differences in customer positioning of state-owned banks." Zhou Yiqin, a senior expert in financial supervision, said that the customer audience of state-owned wealth management companies is generally older, and their ability to bear risks is relatively weak compared with that of joint-stock bank wealth management companies that are mainly younger, and their acceptance of fluctuations in wealth management net worth is relatively weak.
In order to stabilize the scale of products, wealth management companies have launched more wealth management products valued by the amortized cost method, which can smooth out the change of market fluctuations in net value and appease investors who cannot accept net value fluctuations. A number of wealth management companies also retain customers by waiving various handling fees.
"From the current point of view, the scale of wealth management products is basically stable, and the period of large-scale redemption has passed, but we still dare not take it lightly." An insider of a state-owned bank wealth management subsidiary told the Beijing News shell financial reporter that the current bank wealth management products are finding a balance between stability and income and constantly exploring. If it is not stable enough, I am afraid that investors will leave again; However, if you only consider soundness and miss out on future investment opportunities, you will not be able to retain investors. Zhang Dong, general manager of Ping An Wealth Management, said that under the expectation of continuous accompaniment and follow-up economic support from the wealth management department, customers who previously returned to savings deposits are expected to gradually return to the capital market and wealth management market.
Falling demand such as buying a house or rising deposits are one of the factors
The rise in personal fixed deposits may also stem from the decline in consumer demand such as home purchases in recent years. Liu Guoqiang, deputy governor of the central bank, pointed out at the press conference of the State Council's new office on March 3 this year that the epidemic has a certain impact on residents' consumption, and when consumption decreases, deposits will increase accordingly.
Demand for housing continued to weaken last year, and the growth rate and proportion of personal housing business of many banks declined. According to incomplete statistics from Beijing News Shell Finance, among the 25 listed banks that have disclosed their results, 6 banks have negative year-on-year growth in personal housing business, many banks have slightly increased their personal housing loan business, and many have not disclosed relevant businesses.
Last year, real estate market risks were constantly exposed, and according to data from the National Bureau of Statistics, the national commercial housing sales area in 2022 was 13.58 billion square meters, down 24.3% from the previous year.
At the same time, bank housing-related credit has become the "hardest hit area" for the rise of bank non-performing loans. According to incomplete statistics from the Beijing News shell financial reporter, 11 banks disclosed the amount of bad credit in the real estate industry, with a total amount of 1253.42 billion yuan. Among them, 10 non-performing amounts increased year-on-year, totaling 1043.55 billion yuan; only one China CITIC Bank decreased by 1.17 billion yuan year-on-year; and 89 banks increased the non-performing rate of public real estate year-on-year. At the same time, the non-performing rate of the personal housing business, which has always had good asset quality, has also increased.
However, a risk-mitigation campaign targeting the real estate market is proceeding rapidly among banks. Judging from the data disclosed by some listed joint-stock commercial banks, the exposure of real estate business continues to decline. A number of bank executives said that with the continuous advancement of relevant policies such as the 16 financial regulations and the guarantee of handover buildings, the demand for housing purchases may gradually emerge. Zou Jimin, general manager of the risk management department of Industrial Bank, said that at present, the national real estate market has shown signs of recovery, and it is expected that there will be no risk of default by large real estate enterprises in 2023, but it will still take some time for the delivery of first-hand housing guarantees and the recovery of the market, and the risks of specific projects still need to be paid attention to.
According to banking sources in South China, the current demand for improved housing has risen significantly, driving the growth of bank personal housing loans. However, due to the relatively large number of early repayments of personal housing loans at the beginning of this year, it is expected that the growth of personal housing loans will still be slightly weak.
Many banks have taken "stable interest margins" as the focus of this year's performance growth
Although banks generally pursue "deposit banking", the rapid growth of deposits also brings troubles to banks. On the one hand, the sharp increase in deposits has led to an increase in the cost of liabilities, which has made the net interest margin of banks already affected by the decline in loan interest rates. On the other hand, non-interest income, which mainly relies on agency funds and wealth management as growth points, has also been forced to decline in the market turmoil.
A number of banks pointed out in their annual reports that due to the impact of the shock in the capital market, the proportion of low-cost demand deposits of banks has declined. At the same time, due to the increase in the average balance of deposits, the average interest payment rate of banks has risen, and the interest expense of deposits has increased rapidly. ICBC noted that the bank's deposit interest expense increased by 20.7%, mainly due to an 11.8% increase in the average balance of customer deposits and a 13 basis point increase in the average interest payment ratio. ABC pointed out that the bank's interest expense on deposit absorption increased by 17.89% over the previous year, mainly due to the increase in the scale of deposit absorption. CCB's deposit-taking interest expense increased by 12.28%, mainly due to the 8.96% increase in the average balance of deposit-taking and the average cost ratio increased by 6 basis points over the previous year.
"Although the financial regulatory authorities guided the deposit interest rate of commercial banks to fall last year, it has reached a historical low due to the decline in interest rates at the loan end. In order to grab high-quality customers, banks have lower credit interest rates than deposit rates in some areas, which means that deposit products with higher returns, such as large deposit certificates, are being sold at a loss. Some banking insiders revealed that this has also put some pressure on the bank's net interest margin.
According to wind data statistics, among the 25 A-share listed banks that have disclosed their results, only one bank increased slightly year-on-year, one was flat year-on-year, and the net interest margin of the remaining 1 banks is declining. At the results conference, a number of bank executives predicted that with the rapid decline in LPR (loan market quotation rate) after repricing, there is still further pressure on net interest margin to narrow this year. To this end, many banks regard "stabilizing interest margins" as one of the important tasks for bank performance growth this year. Among them, the cost control of liabilities such as deposits has become the "bull's nose" of banks' "stable interest rate spread". A number of banks pointed out that it is necessary to vigorously expand settlement deposits with very low costs and effectively optimize the asset structure to reduce the cost of liabilities.
For the change in the interest rate at the loan end, a bank insider in South China told the Beijing News shell financial reporter that although the current bank credit interest rate is quite different, from the current point of view, the bank's "red door" goal has basically been achieved, so the price war to grab customers is not as fierce as at the beginning of the year, and the credit interest rate in some areas has basically reached the bottom.
Can consumption and investment be effectively released?
A number of bankers surveyed believe that the excess savings formed since last year will fall this year, and bank customers have wavered in buying deposits. "While bank deposits are still the fastest-growing segment, some investors have begun to repurchase bank wealth management and fund products." Xiao Song believes that investors may think that the future investment income will be higher out of judgment of the market, or the current bank wealth management is based on stability, or it may be because asset allocation cannot put all assets in 3-5 years time deposits, and overall bank wealth management is not as difficult to sell as last year.
Zhou Yiqin believes that according to the previous law of the recovery of the fund market, it will take about half a year from the large-scale net value of the product to the market recovery. According to this calculation, it is expected that the size of the wealth management market may return to last year's high point around July this year. At the same time, the central bank disclosed in the "Urban Savers Questionnaire Survey Report for the First Quarter of 7" just released last week that 2023.23% of residents tended to "consume more", an increase of 2.0 percentage points from the previous quarter, while residents who tended to "save more" accounted for 5.58%, down 0.3 percentage points from the previous quarter.
Lian Ping, chief economist of Zhixin Research Institute, said that the recovery of domestic demand, the improvement of real estate sales and the low base effect have promoted consumption to continue to accelerate the pace of repair. In March, with the further restoration of the order of production and life, consumer demand continued to be released. The travel scenes inside and outside the city have basically been restored; Transport logistics are recovering well; Policies to promote consumption in various places have continued, and the consumption of catering, cultural tourism and daily necessities has rebounded.
"The poor flow of logistics and people has been significantly improved, the expansion of consumption scenarios has accelerated, and the preventive savings accumulated in the early stage are expected to be gradually released into actual consumer demand." Liu Guoqiang also said before that a series of policies to promote consumption have been introduced, and the effect of policies will gradually appear. After China's economy improves, it is conducive to enhancing residents' confidence in investment, and residents' investment will gradually return to normal levels.
B02 version - B03 edition writing/Beijing News shell financial reporter Jiang Fan